Dubai’s property scene seems to be on an unstoppable rise, with 2024 projected to be another record-breaking year in terms of sales figures and property values. The demand for property, particularly in the luxury segment, is driving prices up across the city. While this may seem like good news for the real estate market, it also raises concerns for industry insiders like Hussain Sajwani, the chairman of Dubai property giant Damac.
Sajwani recently expressed his worries about Dubai becoming an expensive city due to the influx of talented and average people driving up demand. This surge in demand is not only impacting the real estate sector but also causing price hikes in other aspects of daily life, such as education. As more people flock to Dubai, Sajwani believes that inflation will rise, making the city increasingly unaffordable for many.
The latest data on Dubai’s property market paints a picture of skyrocketing demand. In July 2024 alone, property sales amounted to a staggering 49.6 billion dirhams, representing a 31.63% increase from the same period in 2023. Elite Merit Real Estate, a local brokerage firm, reported that the first half of 2024 witnessed over 43,000 property transactions valued at approximately AED 122.9 billion, showing a 30% surge from the previous year.
The rapid absorption of new inventory has been a significant driver of this growth, with around 80% of units launched since 2022 already being sold. Sajwani acknowledged the strong demand for Dubai property, citing the city’s allure to people from all walks of life, from taxi drivers to businessmen. The influx of both wealthy and talented individuals has contributed to Dubai’s growth, especially following the Covid-19 period.
The Covid-19 pandemic acted as a catalyst for Dubai’s popularity as a place to live and do business. While many parts of the world were under strict lockdown measures, Dubai stood out by welcoming tourists and offering incentives for remote workers and entrepreneurs. Sajwani highlighted how Dubai has transformed into a global city that attracts a diverse range of talents and businesses, positioning it for continued growth in the future.
Dubai has had its share of ups and downs, notably during the 2008-2009 crisis when the property market crashed, leading to widespread defaults among investors. When asked about the possibility of a similar scenario repeating itself, Sajwani expressed confidence in the current system. He attributed this newfound stability to the stringent regulations implemented by the Dubai government post-crisis, which have placed controls on developers, customers, and zoning practices.
While Dubai’s property market continues to thrive, the concerns raised by industry leaders like Hussain Sajwani are not to be taken lightly. The rapid growth and escalating prices may lead to a future where Dubai becomes out of reach for many residents and businesses. It will be crucial for the government and industry stakeholders to find a balance that ensures sustainable growth while maintaining accessibility for all.